July 26, 2005
Let's Put Them In Charge of Health Care!
You have to laugh sometimes to keep from crying. Our beloved legislative branch is at it:
Snake Oil AdditivesNever say Congress isn't willing to accept blame -- as long as it can assign it to someone else. Having mandated the use of the fuel additive MTBE, the Members now want to shake down the companies foolish enough to have made the product.
This is the real story behind the debate over MTBE, which has once again become the sticking point in the House-Senate conference over the energy bill. The House has passed modest liability protection for MTBE makers, while Senate Democrats are threatening a filibuster if there's any such thing in the final bill. If we're lucky, the dispute will cause the hot-air dirigible that is the energy bill to crash and burn one more time. But it's more likely the Members will "compromise" by dropping the House provision and thus blame private business for Congress's mistakes.
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Refiners and other companies now face more than 100 lawsuits, even as they are striving to meet growing energy demand and more elaborate fuel specifications. Draining cash from these companies to finance trial-lawyer contingency bonanzas will not lower gas prices.Bear in mind that the House liability waiver would only be for "product defect" lawsuits, which are the most frivolous and deadly because they only require plaintiffs to show that a company made the product for sale. Defendants would still be liable for larger MTBE spills, and the current Congressional negotiations include talk of some sort of industry-financed clean-up fund. In about 95% of spills, a responsible party has been identified and most are already paying for a cleanup.
I paid attention to this in the 1990s as I was quite concerned about MTBE and Ethanol’s effects on vehicles. I guess I'll have to confess to being wrong on that count -- but right about gub'mint meddling in general.
Markets work. While we're on that topic, Arnold Kling, an oxymoronic "fun economist" over at TCS is starting a new series on the effects of regulation -- a good excuse for even non-economists to learn about the CAPM. Jk gives it four stars!